Intrinsic said:
I don't think you know what remastered is. And i don't think you understand just why and how a subscription model for gaming is not sustainable. And is not something MS would be doing at all if things were a little... different. And if yu really think about it, it would make sense o you too. But let help you along a bit say thereare20M people paying for GP every month. And these 20M pays an average of 10 months in a year (because people will not pay every single month). That's $2B from GP/year. Now deduct whatever it cost them to maintain the service, the cost to secure the non-first party games on the service, the cost to market it..etc. What's left? Lets say $1B (and this being generous). Now imagine that MS makes 4 AAA games a year that cost an average of $80M (some cot more, some cost less), that's $320M to make those 4 games. Now imagine that each game can sell 12M copies in a 12 Month window. And they are sold at an average price of $55 (some buy at $70, some at $60, some at $50 and some at $40). Thats $2.6B+ from just those 4 games. So they make from just 4 AAA games that can sell to around 12M people over 12 months more money than they would make from 20M people paying for GP for 1 year. They turn a $320M investment into a $2.4B return vs a $1B investment into a $1B return (if even that much). And you really can't see why its a bad business model? And this is just one of many issues I touched on before. Anyways... called it. This was exactly what I said and have been saying about this. Its not a sustainable business model. |
There's a big problem with your logic in this example here. The first thing is that you're assuming that those 20 million GP subscribers are lost sales of a game. This is far from the truth. Take me as an example, I have GP and never had an interest to play Nier Automata until this year since it was on GP. I totally loved it and I thought it was worth having the physical copy so I bought it on Amazon. GP has open that door to a lot of games to become visible. So instead I see MS making money from GP AND games sold.
Now, there's another matter called forecasting. MS has tons of economists working for them who I'm sure gave them the pros and cons of a subscription service money wise. Whatever those projections were, MS found them to be worth the risk and investment. And let's not forget that Sony and MS have 2 different expertise here. MS is a software company, Sony has always depended on physical sales. If I were to put my money on who is right about subscription services is MS. After all, Sony sure did gain a lot of money after forcing their buyers into PS Plus just like MS did with Live. Plus MS now has GP basically accessible on every device except for IOS. That has the potential to gain new customers that don't have or would ever have an Xbox. How is that a poor economic decision?
So the reality is that we won't know if in the long term GP will be successful. But what I do know is that MS is not only making money selling games on a console, but they are also making money from subscribers and that seems a win-win situation for me.
